Zomato marked its fourth consecutive profitable quarter with a net profit of Rs 175 crore in the January-March period. Revenue surged by 73% year-on-year to Rs 3,562 crore, despite challenges in the broader e-commerce sector due to inflation and subdued demand.
In the same quarter last year, Zomato had incurred a net loss of Rs 188 crore with a revenue of Rs 2,056 crore.
The company’s stock price has been on the rise, propelled by improved profitability in its core business and the rapid expansion of its quick commerce arm, Blinkit.
Zomato’s stock is currently trading at more than 100 times forward earnings, surpassing the multiples of global peers such as Uber, Deliveroo, and Meituan.
Analysts at Goldman Sachs Group Inc. anticipate upward revisions in profit forecasts for Zomato’s quick commerce business, Blinkit. Investor skepticism regarding the profitability of this business model is expected to wane as more results are disclosed.
ICICI Securities Ltd. analyst Abhisek Banerjee suggests that Zomato’s rich valuations are justified, considering the significantly higher projected revenue and profits for the company. The stock’s performance has closely mirrored that of Doordash Inc. over the past six months, reflecting improved sentiment towards tech stocks worldwide.
